INVO Fertility, Inc. (IVF) September 29, 2026 Conference Transcript

All right. Hello, everyone, and thank you all for continuing to join us throughout the day here at the Lithium Partners Fall 2026 Investor Conference. Again, my name is Robert Bloom, Managing Partner at Lithium Partners. And up next, Steve Shum, Chief Executive Officer of Invo Fertility, will be taking us through a brief slide presentation. As a reminder, the company trades under the ticker symbol IVF on the NASDAQ. Steve, thanks so much for your participation today.

The floor is all yours. thanks robert i appreciate it and appreciate everyone taking the time to listen in today looking forward to telling you about invo and our opportunity uh let's see before i begin i would just encourage everyone to take a quick look at the forward-looking statement language so let's just jump into this uh the company operates within the fertility market our mission is really about helping patients realize their dream of of having a child and and helping to make advanced fertility care more effective and accessible for everyone. We currently operate several clinics that provide a full range of fertility services, and we're working to build a larger network of clinics with the intent of, you know, creating synergies and centralizing key aspects of operations and drive efficiencies for the business. And we're also looking to apply innovative technology that can help increase clinic performance as well as have a positive impact on the patient experiences so as of today we have assembled a solid base operating platform we currently now operate four fully operational fertility clinics across wisconsin georgia alabama and indiana together those operations generated approximately seven and a half million of revenue over the trailing 12 months end of june of 2026 Equally important, the clinic platform generated positive cash flow for the business. We believe that's an important factor for investors to understand here, that the clinics on a standalone basis are generating positive operating earnings before the corporate and public company costs. Overall, the company is not yet profitable. However, the opportunity to grow the clinic earnings and use the infrastructure that we've built across a larger revenue base to drive towards overall corporate profitability, that is a key goal of ours as we move forward. We also ended the second quarter with approximately $3.7 million of cash, $16.5 million of stockholders' equity, which are both materially improved from year-end 2025. and in addition our InvoCell device patent runway now extends through 2040 which helps us preserve a differentiated technology asset within our broader clinic platform. So the company's gone through quite an evolution and it's helped to understand how the company's arrived to where it is today. From approximately 2007 through 2022 Invo was primarily a device technology company. We had developed and commercialized InvoCell device technology for providing an alternative method to conventional IVF for treating fertility. We built the regulatory manufacturing quality systems around the product. We have achieved FDA clearance on that device, and we continue to sell that device to third-party fertility clinics, as well as we utilize that technology in three of our existing clinics ourselves. But, you know, later on, we decided to shift our focus, really broaden out our focus from being just a pure device supplier to a full clinic owner and operator. Initially, of the four clinics, we actually built two of those clinics from scratch in collaboration with physician partners. And then we made our first acquisition of an established clinic, the Wisconsin Fertility Institute, in 2023. During that period, we also pursued a combination with Naya Therapeutics with the intention of bringing in fertility services and a clinical stage therapeutic business together under one public company. for a short period that the businesses operated within that expanded corporate structure but you know in practice however it really added complexity it divided our attention and capital and made the underlying fertility business really more difficult to evaluate so we ultimately divested the majority interest in that naya asset and returned to our roots solely focused on building a fertility services platform which is where we are today so revenue grew to 6.8 million in 2025 we rebranded back to invo fertility with the new nasdaq ticker ivf and this was this was not this was a fundamental change in the business model not just simply a new name uh we've continued that evolution we actually acquired our second uh fertility practice called family beginnings in february of this year we also uh brought the birmingham clinic that was previously a joint venture to 100 ownership in june of this year uh all with the goal of really helping to uh you know again create those synergies across our platform and drive uh and improve performance overall in the business the first half of our revenue increased 20 and we continue to evaluate a robust pipeline of established fertility practices to acquire that we believe could fit within our model. So, we believe the company has now reached really an important point in its operating history. We believe we have a much stronger foundation than it was a year ago. Structurally, NIA has been divested now, allowing management attention and capital to focus on our fertility services platform we've simplified our capital structure all the legacy series c2 preferred stock has been converted we've eliminated warrant liabilities we brought our sec reporting current again regained nasdaq filing compliance and we've established an equity purchase facility that is available at our discretion operationally speaking the clinic platform as i mentioned earlier is profitable before corporate and public company costs second quarter revenue grew 17 percent through the combination of family beginnings as well as our organic efforts birmingham is now fully owned we've expanded our capabilities across operations finance billing and human resources so none of this removes the need for further execution or capital but it has given us again a much stronger platform, a clear operating base from which to pursue the next phase of our growth strategy. So with that, let me turn to the market opportunity here. As you can see, the fertility market as a specialty healthcare area is pretty sizable. The US IVF market is approaching six billion in 2025 and it's projected to grow four to five percent annually through 2033. This has been a market that's historically has enjoyed fairly steady and consistent growth. Approximately 460 US clinics that are reporting assisted reproductive activity performed more than 435,000 treatment cycles in 2022 across that network so demand just has continued to be supported by a number of key factors including increased infertility rates decisions by families to start families later in life expanded employer and state fertility benefits is helping to drive more affordability for patients which is a key demand driver in the industry but you know market growth alone does not guarantee the growth for us uh you know our execution remains essential what we believe you know the sustained macro demand expanding insurance coverage and uneven capacity create a constructive backdrop for us to operate within so the market also remains fairly fragmented despite a significant investor demand over the over the last number of years but most of that investor interest has been in the private markets But the, you know, we've seen roughly in our estimate about 60% of the market has been consolidated, again, largely by private equity under larger network groups, but that still leaves, you know, somewhere around 40% of the market remains very fragmented, individually owner-operated clinics, which serves as a perfect environment for us to pursue our acquisition activity. So we believe we can compete for some of these remaining practices by offering an alternative to the private networks, allowing owner-operators the potential to join a public entity and enjoy the benefits of a publicly traded equity. It doesn't mean that every clinic is a fit. We intend to remain disciplined and focus on experienced physicians with strong local reputations and establish demand and a history of profitability. and that's really our focus for acquisitions. Some of the advantages that we believe we can offer. First, we operate fertility clinics ourselves. We understand that sellers are evaluating more than just a purchase price. They're considering the future of their teams, their patients, their local reputation, the clinical culture they've built. We work to provide, on our end, shared capabilities across administration, finance, billing, marketing, etc. We believe those capabilities can help physicians spend more time on medicine and give a single clinic access to resources that can be difficult to build on their own. And third, you know, the holding period for equity is more flexible than you may typically find with private equity. We can provide liquidity and continued participation in the growth of a broader platform and and our future our success as a public company let me turn to the clinic platform that we built as i mentioned we have four operating clinics currently in wisconsin georgia alabama and indiana wisconsin is our largest operation with approximately 500 annual cycles performed each year near-term priorities at wisconsin include broadening access through progeny something we just recently uh where have been included in the progeny network so patients that are covered under progeny can now come to our wisconsin clinic uh in in some of the other clinics you know we're focused on different initiatives all really the goal across our current clinics is to continue to drive organic growth we believe each one of the clinics has the capacity to handle greater volumes, and so we're working hard to, like I said, grow organically within our existing network of clinics. From an operating standpoint, our goals are pretty straightforward. You know, we want the physicians and the staff at each clinic to, you know, focus on providing great care. From a corporate standpoint, INVO provides accounting, revenue cycle management human resources and various back back office type support functions we believe this frees the clinics and teams to focus on patients improve efficiency and allows corporate functions to be used across multiple locations uh you know we're still refining this model but again the goal is to really drive efficiencies and drive the overall corporation towards profitability that's a key goal of ours on the growth strategy on the growth side it's pretty straightforward to really grow within the existing clinics that we own the second is to you know really to make sure that we retain ownership within each practice that'll be that'll be our objective on a go-forward basis we continue to pursue acquisitions we're going to look to apply innovative technology within our clinics to help again drive patient drive efficiencies as well as the patient experience and really a key the fourth pillar is to continue to pursue acquisitions looking to acquire established profitable clinics with experienced teams uh well and we're really targeting transaction that we expect that will contribute positively to our EBITDA. Shifting briefly to our InvoCell technology, you know, InvoCell was a device that we developed and is the first FDA cleared device that allows fertilization and early embryo development to occur in vivo within the body. The IVC procedure can help support additional lab efficiency and capacity, reduce certain and handling steps and provide for a more connected patient experience. We received a new patent for the device in 2025 that gives us extended protection through 2040. Through the utilization of our device, both in our clinics, as well as clinics outside of our network, we've demonstrated that the effectiveness of the InvoCell device in IVC is equivalent to conventional IVF. let me quickly turn to our financial results here um so uh our recently reported second quarter revenue was approximately 2.2 million which was an increase of about 17 percent from 1.9 million in the prior year period uh clinic revenue increased 18 to approximately 2.17 million The quarter included the first full three-month contribution from family beginnings, along with the organic efforts that I mentioned earlier in our Wisconsin and Georgia clinics. So we're encouraged by the fact that we saw growth coming from the two key areas that we want to see growth from, which is both organic as well as through vis-a-vis through additional acquisitions. Clinic-level adjusted EBITDA was approximately a little over $300,000 compared with $164,000 in the first quarter of this year. And over the trailing 12 months, the clinic platform, again, excluding corporate and public company costs, generated about a positive $829,000 of EBITDA contribution. From a consolidated standpoint, overall, our adjusted EBITDA remain negative at about $1 million for the quarter. So as I mentioned, we're not yet profitable on a consolidated basis due to our corporate infrastructure and our public company costs. SG&A in the period declined to approximately $1.9 million from $2.2 million, primarily due to some lower professional services expense. Really the key takeaway here is revenue growth, a sequential improvement in clinic-level earnings, and a consolidated profitability gap that we're intently focused on improving as we look to drive economies of scale as we continue to grow. This chart just helps kind of give you a visualization of the trajectory that we've been on. As I keep mentioning here, the clinic platform remains profitable on an adjusted EBITDA basis the quarterly results have varied a little bit as we would expect in a relatively small network but the platform remained positive throughout the period we believe those trends provide an excellent opportunity operating base from which to build on so patient volume staffing reimbursement and integration remain important variables in this performance so just to summarize again here we believe that there are you know four principal levers here to gaining greater scale and reaching overall company profitability first increased earnings within the four clinics we currently currently own second add established practices with positive historical and expected ebitda contribution spread our finance billing human resources and operations infrastructure and public company cross across a larger revenue base while controlling corporate costs. You know, we really don't want to, we'll have some incremental growth in our corporate costs, but the goal is to really keep that minimal as we expand and grow our total revenue contribution, which will drive efficiencies. And fourth, you really deploy capital selectively in terms of how we're seeking acquisitions and and deploying technology into the existing clinics so we're not really providing a break-even timetable or forecast on this slide but again the point is is that we have clear objectives they're measurable from our standpoint and it's our job to demonstrate the progress uh to our investors as we move forward from here so uh real quick on the balance sheet at the end of june you know we had approximately 3.7 million in cash during the first half as i mentioned earlier all of our c2 first stock was converted or retired warrant liabilities eliminated um we also put in place an equity purchase facility for up to 15 million with the sales and timing solely at our discretion so we view that as financial flexibility, not capital that must be used. So just to summarize before I turn this back over to Robert, I think we have the right team in place to execute our objectives and look forward to reporting our progress as we move forward. With that, Robert, I'll hand it back to you.

All right. Very good, Steve. Thank you so much for the presentation. Thanks so much for your participation here today and everyone watching. If you'd like to schedule a meeting with management, please send me an email. That's bloom at lithiumpartners.com. To stay connected, make sure to follow us on LinkedIn and subscribe to us on YouTube. So, Steve, thank you so much for your participation here today. Greatly appreciate it. Thank you.